Utility regulators set to award contract to Dirigo Solar

The Maine Public Utilities Commission will award a contract to provide wholesale electricity to Maine power companies to Portland-based Dirigo Solar, a move that a company spokesman said proves large-scale solar-electric projects can work in Maine.

Commissioners last month approved terms of a contract for Dirigo to develop photovoltaic solar arrays that can generate up to 75 megawatts of electricity, enough to power at least 10,000 Maine homes.

Dirigo’s intended delivery point is at a former biomass plant in Deblois, a town in Washington County, but solar farms will be developed across the state to provide the acres of solar panels needed to generate that much electricity, according to terms approved by commissioners Nov. 5.

The company has not said where it intends to build solar arrays, but they will be located where it can tap into the electrical grid through existing infrastructure.

According to a written statement from the company, the project will represent an investment of more than $100 million when it is fully completed.

In 2006 the Legislature had the PUC direct Central Maine Power Co. and Emera Maine to enter into contracts with energy generators to provide energy to the state. Since 2008, the PUC has issued four long-term contracts, mainly to wind projects.

The contract involving large-scale solar farms comes at a time when other utility-scale solar projects are being proposed across the state. Utility-scale solar refers to large, multiple-acre solar farms that generate a lot of electricity compared to the small rooftop installations that are becoming more and more popular for homeowners and businesses.

“What’s significant is that it is recognition that utility-scale solar can work in Maine and can provide low-cost power,” Ted O’Meara, spokesman for Dirigo Solar, said Friday.

“What’s interesting about this award is that there were a number of different proposals, and they were not all renewable,” said O’Meara, a longtime Maine political and communications hand who was campaign manager for Eliot Cutler’s 2014 run for governor.

Dirigo Solar was formed this year by entrepreneurs Brian Murphy and Nicholas Mazuroski and has offices in Westbrook and a Portland mailing address, according to the company’s website. It has 10 solar projects underway focused on New England, but also others in Montana and Oregon, according to the website.

Murphy is a graduate of the University of Notre Dame and Tulane Law School who has previously consulted for renewable energy projects, according to the website. Mazuroski received a bachelor’s degree in political science from Bates College, the website says, and was previously a consultant to the Biomass Power Association, a national trade organization, and led business development for Algasol Renewables, a global algal technology company based in Spain.

According to the terms approved by the PUC, Dirigo will sell its power for a bundled price of $35 per megawatt-hour, with a 2.5 percent annual escalation over a 20-year contract. The project is expected to go online by the end of 2017.

As well as getting paid for the energy it produces, Dirigo will negotiate separate contracts to sell renewable energy credits to electricity companies to fulfill renewable-energy portfolio requirements required by most New England states.

“They believe that with renewable-energy credits and the cost of the technology coming down, they can make this work,” O’Meara said.

The project still has to go through environmental and local permitting and the company needs to secure approved locations for the solar arrays as well as get authorization to tie into the electricity grid from ISO New England, the nonprofit organization that oversees the region’s electricity system.

In an interview Friday, the PUC’s general counsel, Mitch Tannenbaum, said the commission primarily is looking for the company to demonstrate a benefit to Maine ratepayers when it awards contracts.

The contract is a big incentive for companies to complete a project, but it isn’t a guarantee, Tannenbaum said. Despite Dirigo Solar’s recent incorporation and small size, the commission believes it can build out its proposal, he added.

“We look at the ability of projects to get developed, the financing plan, to generally get an idea that it’s not a fly-by-night operation,” he said.

The contract is still being drawn up by the commission, and it might not come back for approval until early next year, he added.

Maine has been behind the curve on utility solar compared to parts of the country, such as the Southeast and the Midwest, and other New England states, including Massachusetts.

But as the cost of solar technology has declined, utility-scale projects have become more attractive, even in Maine, which doesn’t have government incentives to develop solar. The federal government is offering up to 30 percent in income tax credits for projects completed by the end of 2016, when the credit declines to 10 percent for utility projects and expires at the end of 2017.

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